After posting a steep decline in profits during the final three months of 2022, Google-parent Alphabet appears to have stabilized its business at the start of this year.
Alphabet on Tuesday reported that profits from the first quarter fell slightly from the year-ago quarter to nearly $15.1 billion, or $1.17 per share, but still beat expectations. It was also much improved from the December quarter when Alphabet reported profits had fallen by a third.
The company posted $69.8 billion in revenue for the first quarter, up 3% from the same period in the prior year and also slightly ahead of the $68.9 billion analysts’ had projected.
Shares of Alphabet rose 3% in after hours trading following the results.
Like other tech companies, Google has been forced to take significant steps to cut costs in the face of broader economic uncertainty and tightening advertiser budgets.
In January, Alphabet announced plans to eliminate 12,000 jobs and begin rethinking its real estate footprint to cut expenses. On Tuesday, Google said it had incurred $2.6 billion in charges during the quarter from “related to reductions in our workforce and office space.”
But at the same time, Alphabet has continued to invest in cloud computing and its core search engine, including by rolling out new AI-powered tools in an effort to keep pace with a renewed arms race over the technology. “We are pleased with our business performance in the first quarter, with Search performing well and momentum in Cloud,” CEO Sundar Pichai said in a statement.
Its core ad business also appears to have fared better than some analysts feared, despite concerns about a potential recession. Google posted advertising sales of $54.5 billion for the quarter, down less than 1% from the year-ago quarter.
Alphabet’s board has also authorized a share repurchase plan of as much as $70 billion, which may have also buoyed shares.
